Part 6/8:
Safety, or volatility, is another dimension where the U.S. dollar excels. Gold and Bitcoin have both shown price volatility that makes them less acceptable for central banks that prioritize stability. Gold has historically fluctuated in price, while Bitcoin’s volatility has been even more pronounced, rendering it a less feasible option in times of currency crises.
Future Implications for Central Banks
With these factors in mind, the uptick in gold reserves indicates central banks’ intent to safeguard against unpredictable geopolitical events. While there are substantial difficulties associated with storing gold and the need for liquidity, there is a potential role for Bitcoin as a more transportable digital asset in the future if it were to stabilize.